Toellner v. McGinnis

• Court: Washington Supreme Court
• Writing for the Court: CHADWICK, J.
• Citation: Toellner v. McGinnis, 55 Wash. 430, 104 P. 641 (Wash. 1909)
• Decision Date: 29 October 1909
• Parties: TOELLNER et al. v. McGINNIS et al.

104 P. 641

55 Wash. 430

TOELLNER et al. v. McGINNIS et al.

Supreme Court of Washington, En Banc.

October 29, 1909

Appeal from Superior Court, King County; Geo. E. Morris, Judge.

Action by Catherine Toellner and another against Ida J. McGinnis and another. From a judgment for defendants, plaintiffs appeal. Affirmed.

Shepard & Flett, Leyter & Folsom, and Smith & Cole, for appellant.

L. C Gilman and Robert C. Saunders, for respondents.

CHADWICK J.

On July 15, 1889, defendant Ida J. McGinnis, her husband joining leased to Isaac Percival and D. M. Shanks lot 5, block 11, D S. Maynard's plat of the city of Seattle, for a term of 15 years, beginning the 1st day of August, 1889. A ground rent of $200 per month, to be paid in advance, was reserved for the first five years; the rent thereafter to be $250 per month until the expiration of the term. The lease contained the following covenants: 'And it is hereby agreed that if any rent shall be due and unpaid, or if default shall be made in any of the covenants herein contained, then it shall be lawful for the said parties of the first part to re-enter said premises and remove all persons therefrom. And the said parties of the second part do hereby covenant, promise and agree to pay the said parties of the first part the said rent in the manner hereinbefore specified. And said second parties covenant and agree to build and erect upon said premises a substantial brick building not less than two stories in height, costing not less than $15,000.00, and to be not less than 108X60 feet in size, said building to be commenced at once and completed within six months from the date hereof. And said parties hereby covenant and agree that they will at the expiration of said term purchase of the second parties the aforesaid building at two-thirds of the then appraised value thereof; said appraisement to be made as follows: First parties to choose one appraiser, second parties to choose the second appraiser, and the two appraisers so chosen to choose a third, and the decision of a majority of the appraisers so chosen to be final and conclusive upon all the parties hereto. And at the expiration of said term the said parties of the second part will quit and surrender the said premises in good state and condition as reasonable use and wear thereof will permit (damage by the elements excepted), and it is expressly understood and agreed that the payment of two-thirds of the value of said building at the expiration of said term by first parties to second parties shall vest the title to said building fully in first parties. Either party refusing to appoint an appraiser at the end of said term shall forfeit all rights under this agreement. This lease shall apply to and bind the respective heirs, assigns, executors and administrators of the respective parties hereto.'

The lessees erected a brick building on the leased premises at a cost of more than $15,000. Various changes in ownership occurred both by voluntary conveyances and by operation of law, so that, on January 21, 1898, an undivided two-thirds interest therein was owned by Sarah E. Coulter, under an assignment of date April 30, 1897, executed by H. W. Austin, one of the plaintiffs. An undivided one-third interest was owned by E. W. Mills, subject to a mortgage executed in favor of Catherine Toellner on the 21st day of January, 1898, and for some time prior thereto the property was in the immediate possession of C. M. Austin, as agent, with authority to manage and collect the rents for Sarah E. Coulter. On that day defendants began an action against H. W. Austin, E. W. Mills, Catherine Toellner, and the tenants in said building, alleging that there was rent due from said defendants to plaintiffs, and that they had also breached the contract in that said plaintiffs had been compelled to pay the sum of $730.04 taxes which had accumulated, and praying for a provisional writ of restitution, that they have judgment for the rent, and that the lease be forfeited. On the same day they executed a statutory bond, the writ issued, and defendants here, Ida J. McGinnis and her husband, E. W. McGinnis, were put in possession of the premises, and have ever since remained in possession and collected all the rents. On October 1, 1898, H. W. Austin filed an amended answer in that case, wherein he disclaimed any interest in the property and set up the interest of Sarah E. Coulter, his assignee. The default of the other defendants, with the exception of Catherine Toellner, was entered on February 7, 1898. Just prior to the commencement of the action for unlawful detention, C. M. Austin, the agent in charge of the Coulter interests with authority to collect the rents, told the attorney of these defendants that he would pay no more ground rent or taxes on said building, and prior to the commencement of the action E. W. Mills made a like statement to the same party. On October 31, 1898, Sarah E. Coulter, claiming an interest in the lease and property, paid into court the sum of $231.80 as rents and costs, and thereafter in the fall of 1898 paid in the additional sum of $34, making a total of $265.80 which was the full amount of rents and interest due at the time of the commencement of the unlawful detention action, and costs up to the time of payment, which sum still remains in the registry of the court. At that time she asked leave to intervene. Her petition coming on for hearing before the court was denied. She reserved exceptions, but no appeal or further proceedings were taken or had by her. Thereafter she reconveyed all her interest, if any, to H. W. Austin, plaintiff herein. On March 10, 1902, Catherine Toellner, who in the meantime had foreclosed her mortgage (these defendants were not made parties) and bought the interest of Mills, if any, filed a demurrer in the unlawful detention case, and afterwards filed an answer to the complaint in the original action. No judgment was taken in that case against either Sarah E. Coulter, Catherine Toellner, or E. W. Mills. From the time the writ of restitution issued until July 31, 1904, the end of the 15-year term, the net rents of the leased premises amounted to $25,292.77, without deducting the $732.04 taxes alleged to be due at the time of the commencement of the possessory action. The ground rent, which would have been due and paid had the contract been carried out, would have amounted to $19,500. The lower court found the building to be worth at this time the sum of $15,000. On August 15, 1904, Catherine Toellner and H. W. Austin served notice on these defendants that they had selected M. J. Carkeek as their appraiser, as provided in the lease, and demanded that they likewise appoint an appraiser in order that their respective interests in the leased building and appurtenances might be determined. Catherine Toellner and H. W. Austin began separate actions to recover the two-thirds value of the building, and for rents less the ground rent. These actions were consolidated by order of the court. The consolidated case was referred to a referee, who heard the testimony and reported the facts which we have summarized. No exceptions were taken to the findings of fact by either party, and the court made conclusions of law and decreed that plaintiffs take nothing, and dismissed their action. From this decree plaintiffs have appealed.

Appellants summarize their several assignments of error under two heads 'First. The right of plaintiffs, under the terms of the lease quoted, to recover two-thirds of the value of said building at the date of the expiration of said lease. Second. The right of plaintiffs to recover the difference between the stipulated rent, from the date of the entry under the writ to the 31st day of July, 1904, and the amounts actually collected by the defendants between said dates, to wit, $5,792.77, as found by the referee.' Reference to the lease will disclose the main question raised by appellants, and, as we view the case, the only question to be decided by us. It is asserted that the covenant to pay rent with the right of re-entry in case of default, and the covenant to erect a building and to pay two-thirds of its value after the full term, are independent of each other, and, although the parties may have defaulted in the payment of rent, they are not precluded from recovering the value of the building. On the other hand, respondents insist, and the lower court so held, that they are not entitled to recover on the second covenant unless the first be fully performed; that appellants abandoned, surrendered, and have forfeited all their interests in the lease and their right to recover the value of the building. Whichever be the correct view of the law, we are of the opinion that the default in rent and re-entry under the terms of the lease work a forfeiture of all right to rents subsequently earned. We must presume that they had no defense to the unlawful detention action, and none is now urged. It is one of the hardships of the law that a right voluntarily foregone in the hour of adversity cannot be reasserted when prosperity has made the right a valuable one. We shall therefore pass this...